Public sector banks earned more fee income from selling insurance in FY26. SBI led the pack with a 1926% jump in insurance commission growth.
PSB Insurance Commission Growth in FY26
Most government banks saw big jumps in insurance income this year. You know, selling policies now adds real money to their pockets.
SBI topped the list with crazy strong growth numbers. It earned way more from bancassurance than last year.
Other public banks also rode the same wave. They pushed life and general cover through their branch network.
Here is a quick look at the trend:
I’ve noticed that…
| Bank | FY26 Insurance Commission Trend |
| SBI | 1926% growth |
| Most other PSBs | Strong increase in fee income |
Honestly, I feel this is smart work by the banks. They use feetfall at branches to sell cover easily.
For example, you walk in to deposit cash. The clerk offers a small policy. You say yes and the bank earns commission.
So, insurance distribution became a quiet profit machine. It helped banks cut reliance on loan interest.
Why This Trend Matters Now
FY26 shows fee income is the new bank battleground. Banks want steady money beyond lending spreads.
Insurance commissions need low capital and give quick gains. That is why PSBs pushed them hard this year.
After using this for a while…
But competition is heating up with private banks too. They also sell cover and grab young customers fast.
I think customers should compare before buying at branches. A bank policy may not be the cheapest one.
You can read more on how bancassurance works via this simple bancassurance explainer.
Also, the full bank-wise data is in this Economic Times report.
Going forward, expect more SMS and app nudges. Banks will sell insurance like they sell deposits now.
So watch your inbox for policy offers. And check the fine print before you sign anything.
Frequently Asked Questions
Q: Why are public sector banks making more money from insurance lately?
Most PSBs saw fee income climb in FY26 because they’re selling more insurance products through their branches. Bancassurance tie-ups make it super easy for customers to buy policies while doing regular banking, so the banks earn solid commissions.
Q: Is it actually a good idea to buy insurance from my bank?
Honestly, it can be convenient since you’re already there and the process is quick. Just compare the plan with others in the market to make sure the cover and premium work for you.
Q: Which banks are doing best with insurance distribution?
Most large public sector banks reported tidy growth in fee income from insurance in FY26. The biggest gains usually came from those with strong branch networks and active bancassurance partnerships.